1 Way Apple Makes Up for Declining Tablet Market Share

Impressive impressions for the iPad.

Sales are one thing, but actual usage is another. That's a point that Apple (NASDAQ:AAPL) has been trying to drive home over the past year, citing various statistics on how the iPad's usage statistics paint an even rosier picture than its already flattering market share sales digits.

At the company's iPhone 5 event last September, it said that the iPad was grabbing 91% of all tablet web traffic, notably higher than the 68% market share in unit sales it had at the time. The latest figures out of Chitika show that Apple is losing a little bit of ground, although it still has a commanding lead.

Impressive impressionsThe data is built using Chitika's extensive ad network to determine what type of device is being served up an ad impression, and only covers the U.S. and Canada. The iPad comprises 81% of tablet web traffic in those two countries. The distant second was Amazon.com's (NASDAQ:AMZN) Kindle Fire with 7.7% of traffic, followed by Samsung at 3.9%. While Google's (NASDAQ:GOOGL) Nexus 7 is popular among Android enthusiasts, it only grabbed 1.7% of those ad impressions.

This comes shortly after IDC released its unit estimates of the tablet market, showing that the iPad's share fell to 43.6%. The market researcher estimates that Amazon sold 6 million tablets over the holidays, and chances are the 8.9-inch model wasn't selling well. Asus, which builds the Nexus 7, shipped a total of 3.1 million tablets, and most of those were undoubtedly Google's flagship 7-inch tablet.

It's worth mentioning that these figures don't show the whole picture since they only cover the U.S. and Canada. Nearly two-thirds of iPads are now sold internationally, and the device's country availability is far wider than either Amazon or Google. The iPad is sold in 34 countries, compared to Amazon's six countries and Google's eight countries.

A rather important countryThat includes China, where Apple is seeing incredible growth and where Google is not. The search giant continues to butt heads with the Chinese government over censorship issues, and the government has reportedly blocked the sale of the Nexus 7. That hasn't stopped buyers completely, as the Nexus 7 can still be found on the gray market, where it sells at premiums.

Amazon has a small e-tail presence in China, but it doesn't sell the Kindle Fire in the world's most populous nation. Since the company really has no local content offerings available in China and the Kindle Fire is sold at cost, there's simply no reason for the company to sell the device there. That may change in the near future, though, as Amazon just recently set up its e-book store in China a couple months ago. Oddly enough, the company directs users to its Kindle apps on iOS or Android since its own hardware is not available.

The e-tail giant is interested in launching its hardware in China, as it obtained regulatory approvals last June for four different Kindle models, including the Kindle Fire. Amazon also hinted at the time that it was hoping to launch Kindle hardware within two years.

We've seen Amazon play this out before, launching content storefronts ahead of hardware releases. The company debuted its Android Appstore roughly six months before its first-generation Kindle Fire unveiling, and it will likely do the same in the Chinese tablet market eventually.

Until Amazon and Google clear these hurdles, Apple will own the Chinese tablet market even as rivals gain ground in smartphones.

Apple advantageThat means if we were to look at the tablet usage internationally, the odds would be stacked even more in favor of the iPad since it has the widest distribution. Samsung has global scale, but its devices primarily fly under the Android flag.

Usage statistics are meaningful because users aren't likely to upgrade devices that they don't use. The good news for Apple is that people sure like using iPads.

Author

Evan is a Senior Technology Specialist at The Motley Fool. He was previously a Senior Trading Specialist at a major discount broker, and worked briefly at Tesla Motors. Evan graduated from the University of Texas at Austin, and is a CFA charterholder.
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